ARINC

Case Study

ARINC

Region/Country: 
Annapolis, MD
Acquired: 
Oct 2007
Status:

Deep industry expertise. Global scale and presence. Extensive network of Operating Executives. And a wealth of investment portfolio data. These are the four pillars of Carlyle’s ability to drive value in the companies and assets in which our funds invest.

About ARINC and the Transaction

Founded in 1929, ARINC is a prominent global provider of advanced communications and systems engineering services primarily serving the commercial and business aviation, airports, and surface transportation industries. Today ARINC supports more than 15,000 aircraft, 300 airlines, 150 airports, and 200 train systems, along with over half of North America’s nuclear power plants and other critical national infrastructure.

ARINC is headquartered in Annapolis, Maryland and has approximately 1,800 employees in 100 offices around the world.

Key Value Creation Metrics

• Created a strong and experienced board of directors, chaired by Carlyle Operating Executive Thomas Rabaut

• Overhauled executive compensation plans to create a performance-driven culture and compensation model in addition to a Gain Share Program for employees

• Reduced business complexity by consolidating seven business units into five and exiting nine unprofitable start-up businesses

• Achieved significant cost savings through reduction in administrative overhead and streamlined organizational structure

• Successful divestiture of Defense Systems & Engineering Support (DSES) business unit

• Developed innovative service offerings and expanded internationally

• EBITDA margins doubled during ownership

Excellent Outcome for Carlyle Investors

Early on, Carlyle saw an opportunity to reshape the Company into a more focused high-margin, high-growth enterprise. ARINC was already a market leader with #1 or #2 positions in most market segments and sustainable competitive advantages including proprietary technology, a high skilled, technical workforce, and long-term customer relationships. Working with an experienced management team, Carlyle helped ARINC generate consistent earnings growth by refining and focusing corporate strategy and through product and service innovation and international expansion.

ARINC Positioning at Exit

Aviation Solutions  Top provider of aviation air-to-ground data communications globally

ARINC Direct  #1 provider with over 3,000 aircraft under subscription

Airports  #1 provider with approximately 60% share of all installed common use self-service kiosks;
35% market share for common use terminals

Surface Transportation  #1 supplier of rail control centers in North America with ~50% of the
installed base

Security  #1 provider with advanced security systems at >50%
of U.S. nuclear power plants

Aerospace  Advanced engineering expertise and intimate knowledge of key military aircraft platforms